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185 F.3d 61 (2nd Cir.

1999)

LeBOEUF, LAMB, GREENE & MacRAE, L.L.P., PlaintiffCounter-Defendant-Appellee,


v.
EARL WORSHAM, Defendant-Counter-Claimant-Appellant,
THE WORSHAM GROUP, INC., Defendant-CounterClaimant.
Docket No. 98-7941
August Term, 1998

UNITED STATES COURT OF APPEALS


SECOND CIRCUIT
Argued April 9, 1999
Decided July 22, 1999

Appeal from a grant of summary judgment in the United States District


Court for the Southern District of New York (John F. Keenan, Judge),
holding an individual liable for unpaid legal bills. We reverse on the
ground that there is a dispute of material fact over whether the services
were provided to a corporation.
VINCENT P. ESPOSITO, JR., LeBoeuf, Lamb, Greene & MacRae,
L.L.P. (Robert J. Alessi, of counsel), Albany, New York, for PlaintiffCounter-Defendant-Appellee.
EARL S. WORSHAM, pro se, Gatlinburg, Tennessee, for DefendantCounter-Claimant-Appellant.
Before: WINTER, Chief Judge, NEWMAN, and SOTOMAYOR, Circuit
Judges.
WINTER, Chief Judge:

Earl Worsham, pro se, appeals from Judge Keenan's grant of summary
judgment holding Worsham liable for all unpaid bills submitted by the law firm
LeBoeuf, Lamb, Greene & MacRae, L.L.P. ("LeBoeuf"). We reverse because
there is a genuine dispute over the material fact of whether the legal services

were provided to a corporation rather than to Worsham personally.


BACKGROUND
2

Beginning in October 1992 and for two years thereafter, The Worsham Group,
Inc. (TWGI), a group of corporations in which Worsham was one of the
principal shareholders, and, allegedly, Worsham personally, received legal
services from LeBoeuf. These services dealt primarily with TWGI's ventures in
Russia. After various invoices for these legal services went unpaid, LeBoeuf
filed the present diversity action against Worsham and TWGI.

In its complaint, LeBoeuf sought relief on three overlapping claims: (i) a


collection claim on the invoices, (ii) an accounts-stated claim also based on the
invoices, and (iii) a quantum meruit claim for the value of LeBoeuf's services.
LeBoeuf alleged that Worsham and TWGI were jointly and severally liable on
each claim. Following various delays and the withdrawal of Worsham's
counsel, see LeBoeuf, Lamb, Greene, & MacRae, L.L.P. v. Worsham, No. 96
Civ. 2942 (JFK), 1998 WL 55370, at *3-*4 (S.D.N.Y. Feb. 11, 1998)
(describing litigation history), LeBoeuf moved, inter alia, for summary
judgment against Worsham and TWGI on the accounts-stated and quantum
meruit claims. Because TWGI failed to oppose the motion, the district court
entered a default judgment against it. No appeal has been taken from this ruling.

In response to the summary judgment motion, Worsham, representing himself,


sent a letter to the district court. The letter made the straightforward argument
that LeBoeuf had been hired only by TWGI and not by Worsham in his
personal capacity. The letter was signed but unsworn. Nevertheless Worsham
stated: "Under penalty of perjury, I make the statements contained herein." The
district court granted summary judgment for LeBoeuf and against Warsham on
the accounts-stated and quantum meruit claims. See id. at *5.

A judgment was entered on February 20, 1998, but it did not specify the dollar
amount owed by Worsham. On March 18, 1998, Worsham filed a notice of
appeal. On April 13, 1998, this appeal was dismissed for failure to file a preargument statement (Form C) and a transcript request (Form D). Meanwhile,
LeBoeuf moved in the district court to amend the judgment to reflect a sum
certain. The district court amended the judgment on April 16, 1998, stating that
Worsham was liable for $197,224.55 plus interest. Worsham then filed a timely
notice of appeal from the amended judgment on May 14, 1998.

On appeal, Worsham again argues that LeBoeuf provided legal services solely

to TWGI. LeBoeuf contends that we lack appellate jurisdiction to entertain this


issue because it was waived when the original appeal was dismissed.
Moreover, LeBoeuf contends that, even if we do have jurisdiction, there is no
genuine issue of material fact in dispute.
DISCUSSION
7

a) Appellate Jurisdiction

According to LeBoeuf, the judgment entered on February 20, 1998, was final.
Because Worsham's appeal from it was dismissed on April 13, any appeal from
the amended judgment of April 16, which added a sum certain for damages, can
relate only to the amount of damages and not liability. We disagree.

The February 20, 1998 judgment was not a final judgment. Language in the
district court's February 11 opinion states to the contrary, see LeBoeuf, 1998
WL 55370, at *5 ("This case is closed, and the Court directs the Clerk of the
Court to remove it from the active docket."), but a district court cannot render a
non-final judgment final simply by so stating. The February 20 judgment was
non-final because the district court had yet to award damages. "[W]here
liability has been decided but the extent of damages remains undetermined,
there is no final order." Forschner Group, Inc. v. Arrow Trading Co., 124 F.3d
402, 410 (2d Cir. 1997); see also Republic Natural Gas Co. v. Oklahoma, 334
U.S. 62, 68 (1948); Shimer v. Fugazy (In re Fugazy Express, Inc.), 982 F.2d
769, 775 (2d Cir. 1992) (stating that "a final order is one that conclusively
determines the rights of the parties to the litigation, leaving nothing for the
district court to do but execute the order"). Worsham's first appeal was
premature because a final order was not entered until April 16, 1998.
Worsham's second appeal was therefore timely as to both liability and damages,
and we have jurisdiction to review both issues.

10

b) The Merits

11

We review the grant of summary judgment de novo. See Cronin v. Aetna Life
Ins. Co., 46 F.3d 196, 203 (2d Cir. 1995). Summary judgment should be
granted only when, after reviewing the evidence in the light most favorable to
the non-moving party, there is no genuine issue of material fact in dispute and
the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P.
56(c); Tops Markets, Inc. v. Quality Markets, Inc., 142 F.3d 90, 95 (2d Cir.
1998). The initial burden of demonstrating the absence of a disputed issue of
material fact lies with the moving party. See Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986); FDIC v. Giammettei, 34 F.3d 51, 54 (2d Cir. 1994). If the
moving party satisfies this burden, the non-movant "'must set forth specific
facts showing that there is a genuine issue for trial.'" Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed. R. Civ. P. 56(e)).
12

Turning to the merits of the accounts-stated claim, we note that, under New
York law,1 such a claim requires "an agreement between the parties to an
account based upon prior transactions between them . . . ." Chisholm-Ryder Co.
v. Sommer & Sommer, 421 N.Y.S.2d 455, 457 (N.Y. App. Div. 1979). Such an
agreement may be implied if "a party receiving a statement of account keeps it
without objecting to it within a reasonable time" or "if the debtor makes partial
payment." Id.; see also Rosenman Colin Freund Lewis & Cohen v. Neuman,
461 N.Y.S.2d 297, 298-99 (N.Y. App. Div. 1983). Moreover, "an account
stated may be established between an attorney and his client." Kramer, Levin,
Nessen, Kamin & Frankel v. Aronoff, 638 F. Supp. 714, 719 (S.D.N.Y. 1986)
(citing Rodkinson v. Haecker, 162 N.E. 493 (N.Y. 1928)).

13

To prevail on its motion for summary judgment on the accounts-stated claim,


LeBoeuf had to show that, as a matter of law, Worsham personally was the
client for whom all the legal services were performed or that he had agreed to
pay for all such services rendered to TWGI. LeBoeuf's submissions in support
of its motion for summary judgment themselves fail to show that material facts
are not in dispute. According to LeBoeuf's statement of undisputed facts,
Worsham and TWGI had "engaged LeBoeuf to provide legal services to them,"
these services were rendered, invoices were sent and received, some invoices
had been paid, but a deficiency of $146,042.79 existed. LeBoeuf also submitted
the invoices, a number of letters requesting payment, and the checks used to
pay certain of the invoices. LeBoeuf's invoices and letters accompanying those
invoices were addressed to either:

Earl
14 Worsham
c/o Worsham Group, Inc.

15

or:

Earl
16 S. Worsham
Chairman
The Worsham Group, Inc.

17

or:

Earl
18 S. Worsham
The Worsham Group, Inc.

19

Moreover, the checks used to pay these bills were drawn on TWGI accounts
and not Worsham's personal account.

20

Conspicuously absent from LeBoeuf's submissions is any retainer or fee


agreement regarding the legal services it was to perform or for whom they were
to be performed. Also absent is any submission indicating that the services
were performed for Worsham personally rather than for corporations in which
he was a shareholder. To be sure, Worsham was the addressee of the invoices
and letters, but that fact hardly resolves the issue of whether he was receiving
such correspondence as an individual or as a corporate officer. Indeed, one
address used includes Worsham's title as "Chairman of TWGI," a description
that weakens rather than supports LeBoeuf's claim. Finally, when LeBoeuf's
bills were paid, they were paid by TWGI checks. On this record, there is no
basis to conclude as a matter of law that Worsham personally was the client for
whom all the legal services in question were performed. Finally, there is no
circumstantial evidence or evidence of practice from which a conclusive
inference of an agreement by Worsham to pay TWGI's bills might be drawn.
Indeed, a trier might well find it easier to absolve Worsham of any liability than
to impose it because on this record it appears undeniable that many of the legal
services were provided to TWGI.

21

Moreover, Worsham's letter in response to LeBoeuf's motion states that the


legal services in question were performed solely for TWGI. LeBoeuf first urges
us to disregard the letter because it is conclusory. However, given LeBoeuf's
own submissions, it is difficult to see what detail Worsham could have added
other than denying that he was LeBoeuf's client in a personal capacity.

22

LeBoeuf also urges that we disregard Worsham's letter because it was unsworn.
Although we have held that a district court should disregard an unsworn letter
in ruling on a summary judgment motion, see Chaiken v. VV Publishing Corp.,
119 F.3d 1018, 1033 (2d Cir. 1997), cert. denied, 118 S. Ct. 1169 (1998);
United States v. 143-147 East 23rd St., 77 F.3d 648, 657-58 (2d Cir. 1996),
Worsham's letter constituted a declaration pursuant to 28 U.S.C. 1746 and
may properly be considered. Section 1746 allows for the submission of an
unsworn declaration to a court if it "is subscribed by [the declarant], as true
under penalty of perjury, and dated, in substantially the following form: . . . `I
declare (or certify, verify, or state) under penalty of perjury under the laws of
the United States of America that the foregoing is true and correct. Executed on
(date). (Signature)'." 28 U.S.C. 1746 (emphasis added). Worsham's letter
states: "Under penalty of perjury, I make the statements contained herein," and
it is signed and dated. Although the letter does not contain the exact language
of Section 1746 nor state that the contents are "true and correct,"it substantially

complies with these statutory requirements, which is all that this Section
requires. 2
23

LeBoeuf's motion for summary judgment on the accounts-stated claim should,


therefore, have been denied. See Shea & Gould v. Burr, 598 N.Y.S.2d 261, 262
(N.Y. App. Div. 1993) (upholding denial of summary judgment on accountsstated claim where law firm could not establish that the services were rendered
to defendant).

24

LeBoeuf's quantum meruit claim suffers from similar difficulties. To recover in


quantum meruit under New York law, a party must establish "'(1) the
performance of the services in good faith, (2) the acceptance of the services by
the person to whom they are rendered, (3) an expectation of compensation
therefor, and (4) the reasonable value of the services.'" Martin H. Bauman
Assocs., Inc. v. H&M Int'l Transp., Inc., 567 N.Y.S.2d 404, 408 (N.Y. App.
Div. 1991) (quoting Moors v. Hall, 532 N.Y.S.2d 412, 414 (N.Y. App. Div.
1988)); see also Longo v. Shore & Reich, Ltd., 25 F.3d 94, 98 (2d Cir. 1994).
Again, the submissions upon which LeBoeuf relies leave it unclear whether it
rendered services for Worsham or TWGI or some combination.

25

LeBoeuf argues that Worsham is liable in quantum meruit because he


benefitted from its services as an owner of TWGI. However, as noted, New
York law requires more than the receipt of a benefit to support such a recovery.
Moreover, LeBoeuf's argument ignores the legal shield between a corporation
and its officers, directors, and shareholders. To be sure, legal work for a
corporation usually benefits such individuals (and others, such as creditors) by
increasing the value of the corporation. But under New York law (and probably
the law of all states), "[a] principal attribute of, and in many cases the major
reason for, the corporate form of business association is the elimination of
personal shareholder liability." We're Assocs. Co. v. Cohen, Stracher & Bloom,
P.C., 480 N.E.2d 357, 359 (N.Y. 1985). New York law, like that of other states,
also recognizes that officers and directors are, in general, not liable for the
debts of the corporation. See id. Although an individual may affirmatively
assume personal liability for corporate debts, see We're Assocs. Co. v. Cohen,
Stracher & Bloom, P.C., 478 N.Y.S.2d 670, 674 (N.Y. App. Div. 1984), aff'd,
480 N.E.2d 357 (N.Y. 1985), there is no evidence of such an assumption by
Worsham. Nor is there any evidence indicating the applicability of New York's
legislatively established exceptions to the doctrine of limited liability of
shareholders and officers for corporate debts. See, e.g., N.Y. Bus. Corp. Law
1505(a) (McKinney 1986). Therefore, if a trier of fact were to find that TWGI
employed LeBoeuf, as it might easily do on this record, TWGI alone would be
liable.

26

LeBoeuf also contends that Worsham's failure to deny certain portions of the
amended complaint mandates affirmance. Worsham's answer to the complaint
did not deny the allegations in Count III, the quantum meruit claim. Under Rule
8(d), "[a]verments in a pleading to which a responsive pleading is required,
other than those as to the amount of damage, are admitted when not denied in
the responsive pleading." Fed. R. Civ. P. 8(d); see also Weitnauer Trading Co.
v. Annis, 516 F.2d 878, 880-81 (2d Cir. 1975). A responsive pleading (an
answer) is required to a complaint. See Fed. R. Civ. P. 7(a). Thus, LeBoeuf
contends, Worsham has conceded certain facts dispositive to its motion.

27

While it is troubling that no response to this portion of the complaint was made,
LeBoeuf is still not entitled to summary judgment. First, the complaint never
alleged that Worsham alone retained appellee's services. The complaint did
allege that both Worsham and TWGI retained LeBoeuf, and Worsham's answer
denied this allegation. Although LeBoeuf repeated this allegation in Count III,
see Compl. 25 ("Plaintiff repeats and realleges the allegations contained in
paragraphs 1 through 24 . . . ."), Worsham did not have to deny it a second time.

28

Second, the complaint alleges that LeBoeuf fully performed its obligations for
Worsham's and TWGI's benefit and that they would be unjustly enriched if not
required to pay. As discussed above, however, even if these facts are assumed
to be true, LeBoeuf is not entitled to summary judgment against Worsham on
its quantum meruit claim.

29

We therefore reverse.

NOTES:
1

We assume that New York law governs. LeBoeuf's brief relies on New York
law, and Worsham makes no argument to the contrary. Any choice of law
issues can be clarified, if necessary, in future proceedings.

Nissho-Iwai American Corp v. Kline, 845 F.2d 1300 (5th Cir. 1988), one of the
cases upon which LeBoeuf relies, undermines its position. In holding that an
affidavit did not satisfy the requirements of Section 1746, the Fifth Circuit
stated that it was "neither sworn nor its contents stated to be true and correct nor
stated under penalty of perjury." Id. at 1305- 06 (emphasis added). By listing
these requirements in the disjunctive, the Fifth Circuit indicated that a party
need not satisfy all of them in order for a court to consider the affidavit.